SNV - Solar Microfinance Program (Cambodia)

Project Summary

• SNV
• Solar Microfinance Program
• Cambodia
• Project Duration: 2014-2018

The Organisation

SNV Netherlands Development Organisation (SNV) is a not-for-profit international development organisation from the Netherlands. Founded in 1965, we have built a solid local presence in many of the poorest countries in Asia, Africa, and Latin America. In renewable energy, we focus on the themes climate change and sustainable energy markets, under which we engage in clean cooking and heating, as well as off-grid electricity.

The Challenge

Only 35% of households in Cambodia have access to grid electricity, mostly in urban areas. More than 1.6 million rural households currently depend on kerosene and rechargeable car batteries for basic lighting and electricity. Key challenges to the adoption of solar solutions are: a lack of consumer trust in solar, low consumer awareness of the benefits of solar, limited last-mile distribution by solar firms, a lack of financing schemes, limited business management & technical skills among solar staff, and poor sector coordination & policy frameworks.  

Opportunities for Renewables

Affordable small solar home systems (SHS) represent an excellent opportunity to bring modern energy services to rural Cambodian households.

Renewable Solution

SNV implements a technical assistance program in Cambodia that aims to catalyse the development of a sustainable local off-grid solar energy industry to improve energy access for rural households. The intervention is the largest household solar market development initiative in the country to-date, aiming to support the private sector-led delivery of 25,000 SHSs and solar lighting kits to un-electrified rural households nationwide by 2018, while establishing sustainable market structures to benefit local solar entrepreneurs for years to come.

• To enable quality assurance for trust building, the programme developed the first domestic Quality Assurance (QA) framework and dedicated accreditation and quality control process for solar companies and their products, called ‘Good Solar™’.
• To raise awareness and stimulate demand for solar technology, the programme conducts a variety of social marketing and awareness raising interventions, thereby reaching 100,000 people through road shows, school engagement, women’s groups, and evening community event components of the campaign.  
• To tackle the market barrier of affordability, the programme collaborates with four leading Microfinance Institutions (MFIs) with extensive branch- and credit agent networks in rural Cambodia, to allow customers to buy SHSs in instalments.
• The programme operates a private sector results-based incentive fund that offers solar companies a cash reward for each solar product installed that complies with the programme’s quality standards and is financed with a loan from an MFI partner.
• Solar companies are offered staff training and business consulting services through a dedicated ‘Business Development Services (BDS) Hub’.

Project Financing and Costs

The total cost of the programme is €8 million; this includes a $6 million concessional loan from the French Development Agency (AFD) and the European Union (EU) to offer the first-ever dedicated low-interest consumer loans for investment in SHSs in Cambodia.

Project Outcome

As of September 2016, 1,387 rural households had already purchased a certified solar product from one of the six accredited solar suppliers. Quality product and associated customer services are now available in 14 out of 25 provinces in Cambodia. Half of these sales used one of the 687 solar loans from the four partner MFIs, with a total amount disbursed of USD 355,524. And implementation of the first 12 awareness raising campaigns helped to reach and educate about 12,000 rural Cambodians.